Commentary

A Big Win for Social Security Reform

The juice has finally been turned off in the “third rail” of American politics. Congress, the White House, and the public are now seriously talking about privatizing Social Security, at least in part. The program that defined the New Deal may be radically redefined — for the better.

For many years, it was conventional political wisdom that even the most minor attempts to reform Social Security were a political death sentence. But recently, privatization of Social Security — allowing younger workers to invest at least a portion of their Social Security taxes in individual accounts—has moved from academia and think tanks to the political battlefield. And, voters are responding with a firm and definite “yes!”

Anyone who still doubts that voters are receptive to this message of individual control and wealth accumulation, need look no farther than the June 19 special election for Congress from Virginia’s 4th District. Republican State Rep. Randy Forbes survived a massive media campaign attacking his support for individual Social Security accounts, defeating Louise Lucas, an African-American state legislator, to win the seat that had been held by Democratic Rep. Norman Sisisky for nearly 20 years before his death in March.

Forbes supports proposals to allow younger workers to invest a portion of their Social Security taxes in individual accounts. Democrats poured money into a series of television ads attacking that position. Among them was the now-infamous “angina attack” ad. It implied that Social Security privatization would lead to heart attacks among seniors who wouldn’t be able to stand the stress of stock market fluctuations. Democratic strategists were blunt about using this race as a test for anti-privatization tactics they plan to use in the 2002 congressional elections.

But despite this concerted attack, Forbes emerged victorious. Moreover, he did this in a district that was 40 percent African-American and where 50 percent of voters were over the age of 55. Virginia’s Fourth District is a swing district and considered something of a national bellwether. George W. Bush carried it in 2000 by fewer than 500 votes, but Bill Clinton carried the district twice. Democratic candidates for U.S. Senate won in the district in 1998 and 2000, even while losing statewide.

Forbes victory came as something of a surprise to the pundits. But it shouldn’t have. Polls consistently show that voters strongly support giving younger workers the option to privately invest their Social Security funds. A Zogby-Cato poll, conducted earlier this year, found nearly 70 percent of voters supporting privatization.

Bush recognized this in last year’s presidential election, becoming the first major party presidential candidate since Barry Goldwater to tackle the issue. Opponents of privatization threw everything but the kitchen sink at his proposal. But Bush not only won the election, he ran 10 points better among seniors than had Bob Dole four years earlier. Bush has followed through on his campaign promise, appointing a bipartisan commission to develop a specific plan for individual accounts. The Democratic leadership in Congress has responded with something close to hysteria. And many in Bush’s own party have been reluctant to lead the charge on such a controversial issue. (One sometimes gets the idea that the Republican leadership in Congress would prefer to vote on nothing more controversial than Mom, apple pie, and the flag.)

But Forbes’s win, coming on the heels of Bush’s victory, should provide congressional supporters of individual accounts with a new dose of political courage. Give the American people a better retirement system and let the naysayers do their worst. Social Security reform has become, not just good policy, but good politics.

Michael Tanner is director of health and welfare studies at the Cato Institute and founder-director of Cato’s Project on Social Security Privatization.